What UK business owners run into
The first obstacle is rarely the bank. It is usually paperwork timing. High street providers and app-based ones both check that your limited company is live on the Companies House register, and several require the record to have been active for a few days with no recent changes. Directors and people with significant control normally need to be UK residents. A sole trader with a clean record can be approved in under an hour with some providers; a company with a corporate shareholder can wait weeks or get declined outright.
Cash is the second issue. Plenty of UK businesses still handle notes: barbers in Manchester, cafés in Leeds, market stalls in Birmingham. Online accounts differ sharply here. Some charge a percentage on every deposit, some allow only small monthly totals, and a few have no realistic cash route at all. If takings arrive in cash, check the deposit limit before you check the app design.
Bookkeeping is the third. Making Tax Digital has pushed most owners toward Xero, QuickBooks or FreeAgent, and an account that does not connect properly turns into a Sunday evening of copy and paste. Sarah, a freelance illustrator in Bristol, spent her first quarter reconciling three months of invoices by hand because the account she picked supported only one of the two tools her accountant used.
Then there is protection. A bank covered by the Financial Services Compensation Scheme protects eligible deposits up to the standard limit. Payment firms that are not banks safeguard client money through separate arrangements, which is a different promise. Both can be safe to use, but the distinction matters if you keep large balances for payroll or VAT.
Comparing the main options
| Provider | Type | Monthly fee | Good fit | Watch out for |
|---|
| Starling Bank | Full UK bank | £0 | Limited companies, LLPs and sole traders wanting a straightforward account | Cash deposits cost 0.7% with a minimum £3; daily and annual cash limits apply |
| Monzo Business | Full UK bank | Lite £0, Pro £5 | Sole traders and limited company directors who want tax pots and an easy app | £1 charge to pay in cash at Post Office or PayPoint; some features sit behind Pro |
| Tide | Business financial platform, not a bank | £0, Smart £12.49 plus VAT, Pro £24.99 plus VAT | Newer businesses that want invoicing, expense cards and payment links in one place | Cash deposits at PayPoint carry a 3% charge; check which plan includes the tools you need |
| Mettle | NatWest-backed | £0, Mettle+ £4 | Simple banking with no monthly cost | Fewer extras unless you upgrade; limited lending options |
| Barclays, HSBC, Lloyds | High street banks | Roughly £8.50 to £10 after any introductory period | Businesses wanting a lending relationship, branch help or a named contact | More documents, slower onboarding, and charges for items app banks include |
| Revolut Business | Payment firm | From around £10 upward | Traders and consultants paid in euros or dollars | Not a UK bank in the deposit-protection sense; plan tiers change what is included |
Published prices move around, so treat the table as a starting point and confirm on the provider's own pricing page before applying.
Matching the account to how you trade
A Manchester graphic designer working alone has very different needs from a Birmingham limited company with two directors and a payroll run. For the sole trader, a no-monthly-fee account with solid invoicing and instant notifications covers almost everything. Monzo Lite and Starling both sit comfortably there, and neither punishes you for a quiet month.
For the limited company, multi-director access matters more than a pretty app. Starling lets registered directors share access at no extra cost. Lloyds and Barclays remain the better route if you expect to ask for an overdraft or a loan within a year, since a lending history with the same institution carries weight. The trade-off is documentation: photo ID, three years of address history, business details and estimated turnover, plus a signature sample.
If invoices go out in euros or dollars, consider running a currency account alongside rather than instead. A Revolut or Wise Business account handles conversions, while a UK bank account keeps direct debits, payroll and VAT straightforward. Splitting the two adds admin, but it usually costs less than converting every payment at a poor rate.
Switching an existing account is easier than most owners expect. The Current Account Switch Service moves standing orders, direct debits and balances across in seven business days, redirects stray payments afterwards, and covers any charges if something goes wrong. It costs nothing to use, and you can choose the switch date.
Before you press apply
Get the Companies House record in order first. Confirm the company status is active, the registered address is current, and no changes were filed in the past few days. Have a photo of your signature on a white background, a passport or driving licence, and month-by-month addresses for the last three years. Sole traders should have their Unique Taxpayer Reference and a clear description of trading activity ready.
Then decide what the account must do in its first year. Write down three things: how often cash lands, which accounting tool you use, and whether anyone else needs login access. Any provider that fails all three is not worth the application.
After approval, spend twenty minutes on setup. Create a pot or space for VAT and corporation tax so the money is not sitting in the main balance looking spendable. Turn on receipt capture for card spending. Connect the accounting software and check the first import lands correctly. Set a reminder to review the fee statement after twelve months, because introductory pricing on high street accounts tends to expire quietly.
Two shortlisted accounts is enough. Apply to the one that fits your trading pattern, keep the second as a backup, and give the support channel a test message before you commit. The reply speed usually tells you more than the marketing page.
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